Industry Rivalry

Sandra Reed
Mind Map by Sandra Reed, updated more than 1 year ago
Sandra Reed
Created by Sandra Reed over 5 years ago


Professional PHR SPHR Mind Map on Industry Rivalry, created by Sandra Reed on 02/17/2015.

Resource summary

Industry Rivalry
1 Number of Competitors: A high number of competitors leads to high competitive pressure. According to macroeconomic theory, a high number of competitors cause nearly produced at marginal costs and profits are low
2 Industry growth: The competition in fast-growing industries is often lower than in slow growing or even declining industries, because as an extension of their own sales without having market share with competitors
3 Over-capacity / utilization: If the total capacity demand significantly, then the provider struggles to achieve high utilization. This leads to price pressure and thus declining industry attractiveness
4 The proportion of fixed costs in total costs: With high fixed proportions, there is a strong incentive to achieve high utilization, to cover at least a portion of fixed costs. Due to the high pressure of supply, prices fall often almost to the level of the variable costs
5 Exit barriers: The exit of competitors from the market is often necessary to reduce excess capacity. This approach is hampered or delayed if high-conversion or decommissioning costs occur, the business area for the competitors concerned, for strategic reasons, or investments in the past lead to an (irrational) binding to the division ("sunk costs")
6 Product differentiation: The offers of the competitors differ significantly, the interchangeability of products / services, thereby weakened the price pressure drops
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